July 24 (Bloomberg) -- Itochu Corp., Japan’s third-largest
trading house, is nearing an agreement to invest in Thai
billionaire Dhanin Chearavanont’s CP Pokphand Co., according to
people with knowledge of the matter.

A deal could be announced as soon as today, said one of the
people, who asked not to be to be identified as the information
is private. Hong Kong-listed CP Pokphand, which has a market
value of $3 billion, produces animal feed in China and owns
farms in Vietnam.

Shares of CP Pokphand and its Bangkok-listed parent
company, Charoen Pokphand Foods Pcl, were halted from trading
today pending announcements. The board of Charoen Pokphand
Foods, Thailand’s largest meat producer, met yesterday and
approved a “significant” asset disposal by the company and one
of its subsidiaries, it said in an exchange filing today.

Investing in CP Pokphand would help Itochu, the largest
shareholder in Paul Smith Group Holdings Ltd., expand its food
business in Asia as rising incomes boost consumer spending. In
2013, Itochu bought Dole Food Co.’s Asian fruit and vegetable
business and global canned foods unit for $1.3 billion after
partnering with the U.S. producer in Japan for 50 years.

CP Pokphand shares have risen 25 percent in Hong Kong
trading since the start of the year, outpacing the 3.3 percent
gain in the benchmark Hang Seng Index. The company said May 14
its first-quarter profit jumped 38 percent to $41.4 million.
Revenue for the period rose 5.5 percent to $1.25 billion.

Convenience Stores

A Bangkok-based spokeswoman for Charoen Pokphand Foods
declined to comment, while a spokesman for Itochu said he
couldn’t immediately comment.

Charoen Pokphand Foods Chief Executive Officer Adirek
Sripratak is abroad and not available for comment, according his
assistant who picked up a phone call to his office. A person who
answered the phone at CP Pokphand’s Hong Kong office said nobody
at the company was immediately available to comment.

Food accounted for 50.8 billion yen, or 22 percent of
Itochu’s net income in the year ended March 31, data compiled by
Bloomberg show. Three years earlier, the company got 13 percent
of earnings from food.

China Entry

Dhanin has a net worth of $2.4 billion, according to the
Bloomberg Billionaires Index. When Chinese leader Deng Xiaoping
opened the country’s economy in 1979, his family’s Charoen
Pokphand Group was its first foreign investor, registering its
business there as No. 001.

The connection was cemented almost two years ago when the
group invested $9.4 billion to become the largest investor in
Hong Kong-listed Ping An Insurance Group Co., China’s second-biggest insurer.

Dhanin and his brothers turned the family business into
Thailand’s largest agricultural group, making animal feed and
operating farms that produce piglets, broiler chicks, table
ducklings, shrimp and fish. They moved into retailing,
telecommunications and real estate, and expanded to Indonesia,
India, Vietnam and Turkey.

The family is the biggest shareholder of CP All Pcl, which
runs more than 7,700 7-Eleven stores in Thailand, and True
Corp., the nation’s third-biggest mobile phone operator.